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The Guardian: Water issues create strong undercurrent at Rio+20

Studies suggest that the world may be facing a global water shortfall of 40% by 2030 and this is something that governments and industry must face together.

by Brooke Barton —
The Guardian UKPosted on Jul 04, 2012

Studies suggest that the world may be facing a global water shortfall of 40% by 2030 and this is something that governments and industry must face together.

Last month, I was one of more than 40,000 people who descended upon Rio de Janeiro for the Rio+20 Earth Summit. 40,000 is quite a crowd, but it's a drop in the bucket compared to the rapid population growth Rio has seen since the first Earth Summit in 1992 – more than 800,000 residents in 20 years.

Brazil's population as a whole is growing rapidly, and it's changing just as fast. Across the nation, a rising middle class is snapping up air conditioners and other appliances and is expected to push national demand for electricity up 56% by 2021. More than 20 hydroelectric plants are scheduled to be built along the Amazon river's tributaries to meet the new demand for power, but these projects are facing several challenges.

These development dilemmas were a fitting backdrop for Rio+20. They illustrate exactly the kind of questions the conference aimed to answer, including how best to manage natural resources like water.

Recent studies suggest the world may face a 40% global water shortfall by 2030. This is a true paradigm shift, one that governments and industry will have to confront together. The problems are of grave concern to the corporate world, where many businesses face significant water risks, whether their operations rely on hydropower in Brazil or municipal water supplies in parched Las Vegas.

That's one of the reasons why the US Securities and Exchange Commission (SEC) issued guidance in 2010 asking companies to disclose financially material water risks linked to climate change, including "effects on the severity of weather (for example, floods or hurricanes), sea levels, the arability of farmland, and water availability and quality."

Ceres, an advocate for corporate sustainability leadership, took a closer look at how companies have responded to the SEC's guidance by analysing the financial filings of 82 global corporations. The results of that study were announced during the UN Global Compact Meeting at Rio in a report entitled Clearing the Waters.

Comparing data spanning 2009 to 2011, Clearing the Waters finds that corporate disclosure of water risks is increasing across the eight sectors analysed.

Some of the key findings include:

Significantly more companies are disclosing exposure to water risk, with a focus on physical risk. 87% of companies now report physical risk exposure, including risks of water supply interruption or higher agricultural commodity costs due to drought. That's up from 76% in 2009, with the biggest increases coming from the oil and gas sector.

More companies are making the connection to climate change. In 2009, only eight of the 82 companies assessed disclosed that climate change posed growing physical risks in the form of water scarcity, flooding or quality issues to their operations and supply chains. In 2011, that number jumped to 22.

There is growing, but still limited, disclosure on water management systems and performance. In most cases, the information disclosed lacks specificity and hard data.

The Aqua Gauge is the result of extensive interviews with leading companies and NGOs and is backed by investors managing $2 trillion in assets. It's a practical self-assessment tool that outlines detailed steps for effective water risk management, from the boardroom to the factory floor to the farm field.

The Coca-Cola Company is using the Aqua Gauge to advance its own water management and to encourage its suppliers and customers to do the same. The company is on track to improving its water efficiency by 20% by the end of this year (against a 2004 baseline).

Water sustains our economy. We can't afford to squander it, and it will take a collaborative effort from governments, industry and investors to ensure that it is used and managed sustainably. At the very least, the thousands of us who gathered in Rio can attest that the tools and the strategies are already at hand.

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